Alexion Layoffs Raise Concerns with State's ‘First Five' Program

Alexion Pharmaceuticals, the New Haven based company, announced this week that it would lay off 210 employees throughout the company.

According to a company spokesperson, the layoffs amount to about 7 percent of the entire company, and are due to a corporate restructuring.

The layoffs, even though they won't exclusively hit Connecticut employees, shined a spotlight on the state's "First Five" program, aimed at securing and luring major employers to the state.

“If I was an equity investor like the state is, I would want to sit down and know exactly what they’re doing and make sure this agreement is air tight," said Sen. Len Fasano, the Republican President Pro Tem of the Senate. Fasano has advocated for more close oversight and transparency through reporting in all state deals with private companies.

“We shouldn’t stop it," Fasano clarified, noting the state to state competition for companies. "We should have greater oversight and input.”

Alexion could receive as much as $51 million in total state incentives. They include a $20 million forgivable loan which has already been achieved, up to $25 million in tax credits, and a $6 million grant for a new lab.

“As a taxpayer in the state, people should feel very comfortable that the company continues to be a great contributor to our economy," said Catherine Smith, the Commissioner of the Department of Economic and Community Development, which manages the state's economic development programs.

Smith points out that even if some layoffs are felt in New Haven, the company has still delivered more jobs than were required by the agreement with the state in order for the company to realize its full allotment of state giveaways.

“Alexion promised to hire 200 to 300 people. In reality, they hired over 500 people," Smith said.

As a matter of fact, according to state records, the company hired as many as 827 people as of July 2015, making them compliant with the First Five program.

Supporters of state investment in private companies around the country typically point to the creation of indirect jobs, increased income and property taxes, and other benefits of the state stepping in.

In a statement, Gov. Dannel Malloy addressed Republicans critics of the First Five program, saying, "While some may call for pulling the rug out from under our major employers in attempt to score political points, we will continue to focus on strengthening our economy by providing greater stability and predictability for businesses throughout the state.”

A spokesperson for the company said Alexion has more than 1,000 employees currently in Connecticut, but wouldn't say how many layoffs would be in the New Haven office.

The company released a statement, saying, “Alexion initiated a companywide restructuring to help position the Company for sustainable, long-term growth that will allow us to fulfill our mission of serving patients and families with rare diseases."

Smith added that it's not a guarantee that Alexion will take advantage of all of the financial breaks it qualifies for and it's up to them to attain them.

"They’re going to earn them over the next six years and if they don’t have the right number of employees if they haven’t spent the capital they said they would, they won’t get the full tax credit. They may not get any of the tax credit.”

Sen. Fasano says he still wants to see more oversight, and at the very least, the state has a right to demand answers for why there are layoffs at a company where taxpayer dollars are invested.

“When you see a company laying off people that we give money to it begs the question, are they upholding the agreement they signed with the state where we invested money, who’s watching them, who’s talking to them?”

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